Laserfiche WebLink
REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />March 14, 2016 <br />SUBJECT <br />Selection of Financing Team to Refund the Outstanding City of Redwood City One <br />Marina Community Facility District 2011 Bonds <br /> <br />RECOMMENDATION <br />Adopt resolution approving appointment of the consultants in connection with the <br />refunding of the One Marina Community Facility District Bonds, including William <br />Euphrat Municipal Finance, Inc. as municipal advisor; Quint & Thimmig as bond <br />counsel; Sidley Austin, LLP as disclosure counsel; and Stifel, Nicolaus, & Company as <br />underwriter and directing the City Manager to execute professional service agreements <br />with each such firm, and directing staff to take any necessary actions in connection with <br />the refunding <br /> <br />BACKGROUND <br />The One Marina Community Facility District (One Marina) project consists of 249 <br />townhomes in 24 buildings located north-east of U.S. 101, between Bair Island Road <br />and Redwood Creek. In 2010 the City created a community facilities special tax district <br />(CFD) under the Mello-Roos law (California Government Code Section 53311, et seq.) <br />encompassing future residential parcels in the One Marina project in order to finance <br />public infrastructure serving the development. In April 2011 the City sold bonds in the <br />amount of $5,760,000 at then-advantageous tax-exempt interest rates, of which <br />$5,680,000 remains outstanding. The residential project has subsequently been <br />completed and sold to the public. Debt service on the bonds is paid by One Marina <br />residential property owners via a special tax levied on their properties. <br /> <br />Interest rates on the One Marina bonds range from a low of 5.25% for bonds maturing <br />in 2016 to a high of 7.75% for bonds maturing in 2041. Interest rates have declined <br />substantially since the One Marina bonds were sold and the bonds can be refunded <br />with substantial savings to property owners. <br /> <br />ANALYSIS <br />Expected Savings <br />Refunding a bond issue is like refinancing a home mortgage; when interest rates <br />decline new (refunding) bonds are sold to replace the current (outstanding) bonds. The <br />outstanding bonds are paid off prior to their stated maturity dates at the outstanding <br />bonds’ first optional redemption date (September 1, 2016 for the One Marina bonds) <br />and the borrower pays a new, lower annual debt service payment on the refunding <br />bonds. <br />6.3.A. - Page 1